Liz Truss’s disastrous mini-budget is not to blame for the economic crisis facing the UK, one of her closest allies has insisted.
Simon Clarke, who served in the former prime minister’s cabinet, said the war in Ukraine was a bigger factor than Truss’s £45 billion-worth of unfunded tax cuts.
The value of the pound plummeted, interest rates went up and the Bank of England was even forced to intervene to bail out the pensions industry in the wake of the mini-budget, which was delivered by the then chancellor, Kwasi Kwarteng, less than two months ago.
Appearing on Sky News this morning, presenter Sophy Ridge asked Clarke: “Why should people listen to what you have to say?”
But the Middlesborough South and East Cleveland said: “I would reject the idea that what has happened in the economy is primarily a result of the actions that Liz took.
“The reality is that a third of the global economy is now in recession. We are faced with extraordinary headwinds coming out of the situation in Ukraine, which has driven inflation to levels which we haven’t seen in my lifetime.”
However, Clarke added: “I completely accept that mistakes were made with the timing of the mini-budget and I take my share of responsibility as one of Liz’s cabinet ministers.”
Clarke also insisted that Truss is doing well, despite the humiliation of becoming the UK’s shortest-serving prime minister when she was forced to resign after barely six weeks in the job.
He said: “She is remarkably resilient. She’s always been exceptionally dignified and there’s no self-pity there.
“There is obviously regret and we all share regret for what happened, and I certainly continue to regard Liz as both a great colleague and a good friend, and someone who has fundamentally got her perspective on what this country needs to do, right.
“We obviously all have to look back and learn the lessons of what happened in the autumn but ought the message that ought to go out that Britain is a high-tax, high regulation economy, as Labour want it to be, I’m afraid that is not true.”
Clarke also warned Rishi Sunak and Jeremy Hunt not to increase taxes in Thursday’s autumn statement.
The chancellor is expected to unveil plans to slash public spending by £35 billion and put up taxes by £25 billion.
But Clarke said: “It is absolutely right that we balance the books. I would urge Jeremy that we do as much as we can from spending reductions as opposed to tax increases, noting that tax is clearly at a very high level.
“Faced with the recession risk that we all know exists at the moment, I think the best pro-growth option would be to reduce spending rather than to increase taxes.”